In the recent Bermuda case of Up Energy Development Group
Limited, the debtor Company sought to resist a creditor request to
appoint Joint Provisional Liquidators
(JPLs) to monitor the Company's
Up Energy Development Group Limited is incorporated in Bermuda
and listed on the Hong Kong Stock Exchange. Earlier in 2016, the
company announced it had defaulted and was negotiating robustly
with creditors, underwriters and financiers to explore different
options to restructure the company by the end of March. By 29 March
2016, a creditor's petition was presented against the company
on the grounds of non-payment of debt. The Petitioner sought to
appoint JPLs to monitor the continuation of the business and
determine the feasibility of the restructuring proposal if
successfully implemented. Up Energy opposed the appointment of JPLs
as it had retained independent restructuring advisors RSM Corporate
Advisory and hoped to avoid the stigma of provisional liquidation,
especially considering there was no evidence of misconduct of the
management to result in insolvency.
Kawaley CJ held that the crucial use of JPLs to facilitate
restructuring not only alleviates the Court of the load endured by
the US bankruptcy Court, but also gives confidence to both the
Court and to creditors that the restructuring process will be
For these reasons, the Supreme Court of Bermuda ruled that the
Petitioner's application to appoint JPLs be granted on a
'light touch' basis to assist with the restructuring of the
Company and preserve value in the business.
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